26 May 2025 to 30 May 2025
Weekly Bulletin Contents
TAX
Monday 26 May 2025
COVID: Working from home – deduction allowed for rent and travel
A radio broadcaster who during COVID did part of his broadcasting duties from his rented residential premises and who was also required to travel to the radio studios from his home on certain days when he was required to perform broadcasting duties there as well, has been successful before the ARTA in claiming a deduction for a proportion of his rent referable to the use of his home office and also for car expenses incurred in driving between his residence and the radio studio. In allowing the deduction of $6000 for part of his rent, the ARTA said the requirements imposed on the taxpayer by both the state Government and his employer because of COVID lockdown meant that his apartment was both his home and his workplace. In allowing the deduction of $1000 for travel to the studios the ARTA relied on the principle that travel on work from one place of employment to another in the same job is deductible. (Hall and FCT (Taxation and business) [2025] ARTA 600, 21 May 2025)
ATO: CGT and FRCGW – help your clients with the basics
The ATO has created a new factsheet explaining the basics of foreign resident capital gains withholding (FRCGW). The ATO said that it is important that Australian resident vendor entities apply for their clearance certificates as soon as they’re thinking about selling, as certificates can take up to 28 days to process and issue. With a clearance certificate, your clients can avoid 15% being withheld from the property sale. The ATO also emphasised that the FRCGW applies to individuals, companies, trusts, super funds and some not-for-profit organisations.
FBT car parking threshold for 2025–26
The ATO has released the car parking threshold for the FBT year commencing 1 April 2025. It is $11.03 (up from $10.77 for the FBT year that began on 1 April 2024).
Update to PS LA 2011/13: Cross-border recovery of tax debts
The ATO has issued an update to PS LA 2011/13 Cross-border recovery of taxation debts which outlines, among other things, the ATO’s ability to require payment under domestic tax legislation where the debtor is outside Australia; the ability of trustees and liquidators to recover debts in a foreign jurisdiction and how the ATO assists them; and the ATO’s ability to obtain judgment in a foreign jurisdiction to recover debts in that jurisdiction. It has been updated to, among other things, include a “more information” section providing links to relevant OECD publications and other practice statements mentioned.
Tuesday 27 May 2025
Luxury Car Tax thresholds unchanged for 2025-26
The ATO has announced that the LCT thresholds for 2025-26 remain unchanged from 2024-25 – $91,387 for fuel efficient vehicles and $80,567 for other vehicles. This wasn’t because vehicle prices haven’t increased at all. They did, by just 0.997 per cent, and where the annual price movement is less than 1 per cent the thresholds are not adjusted.
Institute of Financial Professionals Australia (IFPA) Comment
There has been talk recently about finally ditching the 33 per cent LCT, perhaps in the context of trade negotiations with the European Union. As things stand, the LCT is a policy relic that protects a non-existent Australian car making industry by making the cars that many Australians want to drive more expensive than they are in most other places.
Parliament to resume on 22 July 2025
The Prime Minister has announced that the new Parliament will be sworn in by the Governor-General on 22 July 2025. Once the formalities are out of the way, the re-elected Labor government will no doubt set about implementing the various promises it took to the recent election.
Measures expected to be legislated regrettably include the controversial 15 per cent section 296 tax on super account balances over $3 million. The revenue this measure is expected to raise has already been committed and the government will have the numbers to get it passed in both houses. In spite of the best efforts of industry (including IFPA), none of the language used by key government figures in recent days suggests there are any plans to change course.
Stamp duty relief proposed for Victorian first home buyers
In a surprise move, the Victorian Liberals and Nationals have today announced plans to scrap stamp duty for first home buyers on houses costing up to $1 million. If implemented (and Victoria is scheduled to go to the polls in November next year), the proposed exemption would give first home buyers a welcome leg up at auctions in the years ahead.
We note, however, that there is no mention in the media release of how the concession will be funded.
Wednesday 28 May 2025
Addressing the Growing Burdens on Tax Agents: A Conversation with the Tax Ombudsman
The Institute of Financial Professionals Australia’s (IFPA) Acting General Manager, Ky Wilson, recently met with Ruth Owen, the Tax Ombudsman, to discuss the increasing administrative burdens faced by tax agents and financial professionals. This conversation addressed the real-world frustrations of members and highlighted the urgent need for a practical, fair, and accountable tax system.
Read the transcript of the meeting here.
ATO: Another 3 people sentenced under Operation Protego
The ATO has advised that another 3 people have been sentenced to jail time in May, as the ATO continues to pursue and prosecute perpetrators of GST fraud under Operation Protego. The ATO said that these prosecutions send a strong reminder that the ATO bring those who commit fraud to account and that the ATO will actively pursue debts obtained through fraudulent GST funds, using all the tools at our disposal to recoup those funds. The ATO also emphasised that it is equipped with resources, sophisticated data matching, analytics capability and intelligence sharing relationships for these purposes.
Vic: State taxation Bill – miscellaneous amendments
The State Taxation Acts Amendment Bill 2025 (Vic) has been introduced into the Victorian Parliament. Among other things it will amend:
- the Commercial and Industrial Property Tax Reform Act 2024 to authorise the Commissioner to provisionally determine that land has a qualifying use for the purposes of that Act;
- the Duties Act 2000 to relation to: duty payable on a transaction that relates to subdivided tax reform scheme land; and exempting persons affected by family violence from certain requirements under that Act;
- the First Home Owner Grant and Home Buyer Schemes Act 2000 to exempt persons affected by family violence from certain conditions imposed by that Act;
- the Land Tax Act 2005 in relation to: exempting persons affected by family violence from certain requirements under that Act; dwellings in a build to rent development; circumstances in which the Commissioner must be notified of matters involving land subject to a trust; and making further provision for exemptions from land tax for land used and occupied as a person’s principal place of residence;
- the Payroll Tax Act 2007 to make further provision for the circumstances in which an employee will be a regional employee for the purposes of that Act; and
- the Taxation Administration Act 1997 to introduce a new rate of penalty tax for recklessness by a taxpayer or their agent as to the operation of a taxation law or their obligations under certain taxation laws.
ATO: Navigating SMSF crypto assets
The ATO has advised that with a growing number of self-managed super funds (SMSFs) investing in crypto assets it’s important to be aware of the potential risks. The ATO also said that it has seen instances of SMSF trustees losing their crypto investments due to theft, lost passwords, and impersonation schemes. In this regards, the ATO listed some essential tips to help navigate crypto investments for an SMSF: Make sure your SMSF’s crypto wallet is registered in the name of your SMSF; Keep your personal crypto investments separate from your SMSFs assets (failing to do this can be a breach of the Superannuation Industry (Supervision) Act 1993); Always purchase and trade on reputable, well-established platforms; Record all transactions, including purchases, sales, and transfers of crypto assets. Sales and transfers are classified as ‘disposals’ and may result in CGT; Never share your wallet password with anyone. When transacting in crypto assets with related parties, all transactions must be done at arms-length.
Thursday 29 May 2025
Interim Decision impact statement on Shaw’s case
The ATO has released an Interim decision impact statement on Shaw and FCT [2025] ARTA 224, which concerned whether the taxpayer, an employee long-haul truck driver, was entitled to a deduction under s 8-1 of the ITAA 1997 for work-related travel expenses claimed in respect of meals. The Tribunal held that the meal expenses were deductible under section 8-1 because they were incurred in gaining or producing his assessable income. The Tribunal also considered whether the taxpayer was entitled to rely upon the exception from substantiation under s 900-50 and whether s 900-200 would have applied to relieve the taxpayer from the obligation to substantiate the meal expenses. The ATO said that until the appeal process is finalised, it does not intend to revise the current ATO views contained in the following public rulings dealing with work-related travel expenses and record keeping, including substantiation and the substantiation exception: TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses; TR 95/18 Income tax: employee truck drivers-allowances, reimbursements and work-related deductions; TR 97/24 Income tax: relief from the effects of failing to substantiate; and TD 2020/5 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2020-2021 income year?
Draft GST determinations issued
The ATO has issued the following draft GST related determinations:
- LI 2025/D6: A New Tax System (Goods and Services Tax) (Application of Intermediary Arrangements to the Multi-Media Industry) Determination 2025 – which specify that supplies or acquisitions of multi-media products will be taken to be supplies or acquisitions to which the arrangements in s 153-50 of the GST Act for multi-media products apply. It will replace the existing 2015 instrument which will sunset on 1 October 2025 and has the same substantive effect as the 2015 Determination. Comments due 25 June 2025.
- LI 2025/D7: A New Tax System (Goods and Services Tax) (Waiver of Tax Invoice Requirement – Direct Entry Services) Determination 2025 – which waives the requirement for a recipient of a supply of a “direct entry service” to hold a tax invoice before the relevant input tax credit will be attributable to a tax period – in certain defined circumstances. It will replace the existing 2015 instrument which will sunset on 1 October 2025 and has the same substantive effect as the 2015 Determination. Comments due 25 June 2025.
ATO: Upcoming personal transfer balance cap changes
The ATO has advised that new proportionally indexed personal transfer balance caps are expected to display in ATO online from 11 July 2025. By way of background, the ATO said the general transfer balance cap (TBC) will be indexed on 1 July 2025, increasing from $1.9m to $2m. This increase will impact members with a personal TBC. Members who have commenced a pension prior to 1 July 2025 and haven’t previously reached or exceeded their personal cap will be eligible for a proportional increase, based on their highest ever transfer balance and the amount of unused cap space. The ATO also said that members starting a pension for the first time on or after 1 July 2025 will be entitled to a personal TBC of $2m.
FRIDAY 30 May 2025
Withholding obligations: administrators and trustees of bankrupt estates
The following instruments relating to withholding obligations re payments made by external administrators and trustees of bankrupt estates:
- PAYG Withholding Variation: Variation of amount to be withheld from certain payments made by external administrators and trustees of bankrupt estates – it provides a simple withholding calculation for external administrators and trustees in bankruptcy, when paying entitlements that accrued prior to their appointment. A flat rate of 34.5% will apply to these payments. This is the marginal tax rate which applies to annual incomes between $37,000 and $80,000. That rate will be appropriate for most recipients of these payments.
- Taxation Administration (Withholding Variation for Certain Payments Made by External Administrators and Trustees of Bankrupts’ Estates) Legislative Instrument 2025 – it repeals and replaces the same 2015 Instrument which would otherwise sunset on 1 October 2025. It has the same effect as the 2015 Instrument, with the exception of the withholding rate, which has been changed from 34.5% to 32% to take account of changes to income tax rates.
Updated 2025 Parliament sitting calendar released
An updated proposed Parliament sitting calandar has been released. Both Houses are expected to sit on the 22 July 2025. The Prime Minister noted that he intends to progress the legislative agenda that was taken to the last election.
Institute of Financial Professionals Australia (IFPA) comment
It is expected that the Division 296 tax Bill proposing an additional 15% tax on super earnings for balances above $3 million dollars will be put forward.
SUPER & FINANCIAL SERVICES
Updated 2025 Parliament sitting calendar released
An updated proposed Parliament sitting calendar has been released. Both Houses are expected to sit on the 22 July 2025. The Prime Minister noted that he intends to progress the legislative agenda that was taken to the last election.
Institute of Financial Professionals Australia (IFPA) comment
It is expected that the Division 296 tax Bill proposing an additional 15% tax on super earnings for balances above $3 million dollars will be put forward.
ATO: Upcoming personal transfer balance cap changes
The ATO has advised that updated personal transfer balance caps will be available online from 11 July 2025. The updated caps will include an individual’s proportional indexation.
The transfer balance cap (TBC) will be indexed on 1 July 2025, increasing from $1.9m to $2m. This increase will impact individuals with a personal TBC. Individuals who have commenced a pension prior to 1 July 2025 and haven’t previously reached or exceeded their personal cap will be eligible for a proportional increase, based on their highest ever transfer balance and the amount of unused cap space. Individuals starting a pension for the first time on or after 1 July 2025 will be entitled to a personal TBC of $2m.
IFPA comment
Advisers are reminded that SMSFs are required to report events that impact members’ transfer balance accounts every quarter, regardless of a member’s total superannuation balance. Care should be taken to consider any events that may impact a member’s transfer balance account that have not yet been reported to the ATO as this will not be reflected online.
ATO updates SMSF compliance audit page
The ATO have updated their page ‘Compliance audit of an SMSF’. The page includes a useful checklist for SMSF auditors. The page also outlines requirements for conducting compliance audits, emphasising auditor competencies, adherence to Assurance Engagements Standards, and thorough documentation. Key checks include verifying the fund meets the SMSF definition, maintaining proper accounting records, ensuring compliance with the sole purpose test, and confirming assets are valued at market value. Auditors must also assess trustee adherence to restrictions on loans, related-party acquisitions, and in-house assets, while ensuring proper record-keeping and fair allocation of investment returns.
IFPA comment
Advisers should also note the ATO’s recent focus on market valuation, as highlighted in their updated page ‘Market valuation of assets and the role of auditors’. The ATO identified issues with SMSFs not using market valuations, particularly for properties and unlisted trusts.
ATO provides tips for SMSF crypto assets
With more SMSFs investing into crypto, the ATO is urging trustees to understand the risks – including theft, scams, and password loss.
The ATO has provided the following key tips:
- Use the SMSF’s name: The crypto wallet must be in the SMSF’s name, not the trustee’s or a personal account.
- Keep things separate: Never mix personal and SMSF crypto assets – it’s a breach of the rules.
- Stick to legitimate platforms: Use trusted, secure, and well-reviewed exchanges. Look for business registrations and clear policies.
- Keep strong records: Track all transactions and wallet changes. Sales and transfers trigger CGT and need to be documented.
- Protect passwords: Never share wallet credentials. Store them securely.
- Avoid related party dealings: All SMSF crypto transactions must be at arm’s length.
- Provide valuations: Ensure accurate market valuations are available for audit.
Trustees must also be aware cautious of ATO impersonation scams – especially those demanding wallet access or claiming crypto tax issues.
ASIC Commissioner highlights super’s success and failings
In a recent speech, ASIC Commissioner Simone Constant praised Australia’s $4.2 trillion superannuation system, which accounts for 160% of GDP and ranks fourth globally.
However, she highlighted systemic issues with death benefit claim delays, such as a widow waiting a year for a $600,000 payout. ASIC is addressing these through a multi-year project, issuing 34 recommendations and pursuing legal action against funds like AustralianSuper and Cbus. The Commissioner also pointed out governance shortcomings, with trustees often lacking data on claims and complaints, which undermines public trust.
IFPA comment
Advisers with clients facing unreasonable delays in claims can direct them to the Australian Financial Complaints Authority (AFCA) who is the Financial Ombudsman.
APRA releases super statistics for March 2025
The Australian Prudential Regulation Authority (APRA) has published its March quarter superannuation performance statistics.
Key statistics for the superannuation industry as at 31 March 2025 are as follows:
| March 2024 | March 2025 | Annual change | |
| Total superannuation assets | $3,897.6 billion | $4,129.0 billion | +5.9% |
| Total APRA-regulated assets | $2,692.1 billion | $2,890.8 billion | +7.4% |
| Total self-managed super fund assets | $979.4 billion | $1,005.5 billion | +2.7% |
| Exempt public sector superannuation schemes assets | $169.6 billion | $173.4 billion | +2.2% |
| Balance of life office statutory fund assets | $56.5 billion | $59.3 billion | +5.0% |
IFPA comment
Increasing net super contributions together with strong performance has increased the pool of superannuation assets to over $4.1 trillion dollars as at March 2025 (up from $3.8 trillion at March 2024).